Acc

The given data arranged in the form of a working table Standard [Output : 1 kg] Actual [Output : 1,000 kg]
Quantity Price Value/Cost Quantity Price Value/Cost (kgs) Rs/kg (Rs) (kgs) Rs/kg (Rs) Groundnut Total Less: Loss Actual Net SP(SO) = SCMix SO SP(SO) = 1 Rs. 9.80 1 kg 4 4 3 2.45 9.80 9.80 3,600 1,000 SP(SO) = Rs. 9.8/kg 4,600 4,600 2.75 12,650 12,650
Assumptions: The information relating to losses would be useful only for the purpose of ascertaining the output (either actual or standard). For calculating variances the information relating to losses is of no use (except where you may find the yield variance based on losses) The information is presented in the working table only for the purpose of brining in uniformity in the presentation for all problems. By Input or Total Quantity of Actual Mix (AQMix) we mean the gross input and not the net. Input and output may be in different terms (say one in kgs and the other in kgs) in which case also the information relating to losses would be useful only for ascertaining the outputs if at all they are not given. Material Cost Variance Study Notes = ({ AO SO SQ } SP ) (AQ AP)
MCV
= ({
1,000 kgs 1 kg
4 kgs } Rs. 2.45/kg ) (4,600 kgs Rs. 2.75/kg)
= ({1,000 4} Rs. 2.45) (4,600 Rs. 2.75) = (Rs. 9,800) (Rs. 12,650) = Rs. 2,850 Material Price Variance Study Notes MCV = Rs. [Adv] 2,850
= AQ (SP AP) MPV = 4,600 kgs (Rs. 2.45/kg Rs. 2.75/kg)
= 4,600 kgs ( Rs.
0.30/kg) = Rs. 1,380 Material Usage/Quantity Variance Study Notes AO SO SQ } AQ ) SP = MPV Rs. [Adv] 1,380
MUV/MQV = ({
1,000 4 kgs } 4,600 kgs ) kg = ({ Rs. 2.45/kg 1 kg = ({1,000 4 kg} 4,600 kg) Rs. 2.45/kg
= (4,000 kg 4,600 kg) Rs. 2.45/kg = ( 600 kg) Rs. 2.45/kg = Rs. 1,470 Material Mix Variance Study Notes Since there is only one type of material being used, there will be no Mix Variance i.e. MMV = 0 Material Yield/Sub-Usage Variance Study Notes AQMix SQMix SO} ) SP(SO) MUV/MQV = Rs. [Adv] 1,470
MYV = (AO {
(1,000 = kgst { =
4,600 kgs 4 kgs
1 kg} ) Rs. 9.80/kg
(1,000 kg {1,150 1 kg} ) Rs. 9.80/kg
= (1,000 kg 1,150 kg) Rs. 9.80/kg = ( 150 kg) Rs. 9.80/kg = Rs. 1,470 Alternatively = MYV/MSUV Rs. [Adv] 1,470
Since Material Mix Variance is zero all usage variance is yield variance i.e. MYV = MUV/MQV . MMV + MUV/MQV = MYV/MSUV = 0+ MYV/MSUV Therefore, MYV/MSUV = Rs. [Adv] 1,470
= MYV/MSUV
Calculations:
Actual Price at which materials are purchased =
Actual Total Cost of Materials Purchased Actual Quantity of Material Purchased Rs. 2,52,000 2,80,000 kg
= Rs. 0.90/kg
Working Table:
The given data arranged in the form of a working table
Standard
[Output : 70 kg]
Actual
[Output : 2,10,000 kg]
Quantity Price Value/Cost Quantity Price Value/Cost (kgs) Rs/kg (Rs) (kgs) Rs/kg (Rs)
Groundnut 100 100 30 1 100 100 70,000 70 SP(SO) = Rs. 10 7 2,10,000 /Kg 2,80,000 2,80,000 0.90 2,52,000 2,52,000
Total Less: Loss Actual Net SP(SO) = SCMix SO

SP(SO) =
Rs. 100 70 kgs
Assumptions:
The information relating to losses would be useful only for the purpose of ascertaining the output (either actual or standard). For calculating variances the information relating to losses is of no use (except where you may find the yield variance based on losses) The information is presented in the working table only for the purpose of brining in uniformity in the presentation for all problems.
By Input or Total Quantity of Actual Mix (AQMix) we mean the gross input and not the net. Input and output may be in different terms (say one in kgs and the other in kgs) in which case also the information relating to losses would be useful only for ascertaining the outputs if at all they are not given.
Notice:
The information relating to losses would be useful only for the purpose of ascertaining the output (either actual or standard). For calculating variances the information relating to losses is of no use (except where you may find the yield variance based on losses) The information is presented in the working table only for the purpose of brining in uniformity in the presentation for all problems.
By Input or Total Quantity of Actual Mix (TQAM) we mean the gross input and not the net.
Input and output may be in different terms (say one in kgs and the other in kgs) in which case also the information relating to losses would be useful only for ascertaining the outputs if at all they are not given.
MCV
Material Cost Variance

= ({
Study Notes
AO SO
SQ } SP ) (AQ AP)
= ({
2,10,000 kgs 70 kgs
100 kgs } Rs. 1/kg ) (2,80,000 kgs Rs. 0.90/kg)
= ({3,000 100} Rs. 1) (2,80,000 Rs. 0.90) = (Rs. 3,00,000) (Rs. 2,52,000) = + Rs. 48,000 MCV = + Rs. [Fav] 48,000
MPV
Material Price Variance Study Notes

= AQ (SP AP) = = 2,80,000 kgs (Rs. 1/kg Rs. 0.90/kg) 2,80,000 kgs (+ Rs. 0.10/kg) MPV = + Rs. [Fav] 28,800
= + Rs. 28,800
Material Usage/Quantity Variance

AO SO SQ } AQ ) SP
Study Notes
MUV/MQV = ({
= ({
2,10,000 kg 70 kg
100 kg } 2,80,000 kg ) Rs. 1/kg
= ({3,000 100 kg} 2,80,000 kg) Rs. 1/kg = (3,00,000 kg 2,80,000 kg) Rs. 1/kg = (+ 20,000 kg) Rs. 1/kg = + Rs. 20,000 MUV/MQV = + Rs. [Fav] 20,000
Material Mix Variance Study Notes

Since there is only one type of material being used, there will be no Mix Variance i.e. MMV = 0
Material Yield/Sub-Usage Variance Study Notes

AQMix SQMix
SO} ) SP(SO)
MYV = (AO {
(2,10,000 kg = {
2,80,000 kg 100 kg
70 kg} ) Rs.
10 7
/kg
= (2,10,000 kg {28,000 70 kg} )
10 7
/kg
= (2,10,000 kg 1,96,000 kg)
10 7
/kg
= 14,000 kg
10 7
/kg MYV/MSUV + Rs. [Fav] 20,000
= + Rs. 20,000
Alternatively
Since Material Mix Variance is zero all usage variance is yield variance i.e. MYV = MUV/MQV .
MMV + MYV/MSUV
0+ MYV/MSUV Therefore, MYV/MSUV = + Rs. 20,000 [Fav]
MUV/MQV =
=
= MYV/MSUV
Calculations:
Actual Total Cost of Materials Purchased Actual Quantity of Material Purchased Rs. 10,000 4,000 kg
= Rs. 2.50/kg
Calculation of Value of Materials Consumed:

Quantity Rate (kgs) (Rs/kg)
Opening Stock of Materials 1,000 4,000 5,000 2,000 3,000 2.00 2.50 2.40 ??? ???
Value (Rs.)
2,000 10,000 12,000
Add: Purchase of Materials Total Stock Less: Closing Stock of Materials Value of Material Consumed
a
(12,000 a)
Finding the value of materials consumed involves:
Finding/Assuming given). Hide/Show
the
value
of
opening
stock
(if
not
Finding the value of closing stock.
Hide/Show
Working Table:
Standard
[Production: 1 unit]
Actual
[Production: 1,000 units]
Material Used 2.5 2.5 Rs. 5 1 unit 2 5 5 3,000 3,000 8 3 8,000 8,000
Total SP(SO) = SCMix SO

SP(SO) =
SP(SO) = Rs. 5/unit
Assumptions:
None.
Notice:

The working table contains data relating to material consumed for the output achieved. But for the problem of deciding the value of closing stock, which would reveal the value of material consumed, there is no difference in approach for solving other problems and this problem.
Price Variance related to purchases made during the current period

Current Period purchases = 4,000 kgs Purchase price = Rs. 2.50/kg Standard price = Rs. 2/kg Price Variance relating to the purchases made during the current period = Quantity Purchased (Standard Price Actual Price) = 4,000 kgs (Rs. 2/kg Rs. 2.50/kg) = 4,000 units ( Rs. 0.50/kg) = Rs. 2,000 [Adv] This will be the "Material Price Variance (MPV)" that you would find through your calculations. Though only the material consumed is considered for calculations, the MPV reveals the variance in relation to the purchases made during the current period. This happens if you value the Opening as well as Closing Stocks at Standard Prices.
Approximate Decimal Values (Or) Exact Fractional Values :: What to use in Calculations?
In calculations, where we come across fractions, we many a times use their approximate decimal equivalents (Say we use Rs. 2.67 in place of Rs. 8/3).
Where you have used such approximate decimal equivalents, you need to understand that there would be slight variation in the answer arrived at. This would be crucial in this topic, where you are trying to verify the variances using the inter relationships among the variances. In such cases, slight adjustments would have to be made to arrive at the correct conclusion. To avoid such occurances, you can use the fractions themselves in calculations, instead of their approximate decimal equivalents. One another way the need for adjustment may be avoided is by using large number of digits after the decimal.

MCV = ({ AO SO
Study Notes
SQ } SP ) (AQ AP)
= ({
1,000 units 1 unit
2.5 kgs } Rs. 2/kg )
(3,000 kgs Rs.
8 3
/kg)
= ({1,000 2.5} Rs. 2) (1,000 Rs. 8) = (Rs. 5,000) (Rs. 8,000) = Rs. 3,000 MCV = Rs. 3,000 [Adv]

MPV
= AQ (SP AP) 3,000 kgs (Rs. 2/kg Rs. 8 3
/kg)
3,000 kgs = (
Rs. 6/kg Rs. 8/kg 3
= 1,000 kgs ( Rs. 2/kg) = Rs. 2,000 MPV = Rs. [Adv] 2,000

MUV/MQV = ({ AO SO SQ } AQ ) SP
Study Notes
= ({
1,000 units 1 unit
2.5 kgs } 3,000 kgs ) Rs. 2/kg
= ({1,000 2.5 kgs} 3,000 kgs) Rs. 2/kg = (2,500 kgs 3,000 kgs) Rs. 2/kg = ( 500 kgs) Rs. 2/kg = Rs. 1,000 MUV/MQV = Rs. 1,000 [Adv]

MYV = (AO { AQMix SQMix
SO} ) SP(SO)
(1,000 units = {
3,000 kgs 2.5 kgs
1 unit} ) Rs. 5/unit
= (1,000 units {1,200 1 unit} ) Rs. 5/unit = (1,000 units 1,200 units) Rs. 5/unit = ( 200 units) Rs. 5/unit = Rs. 1,000 MYV/MSUV = Rs. [Adv] 1,000
Alternatively
Since Material Mix Variance i.e. MYV = MUV/MQV .
MUV/MQV =
=
is
zero
all
usage
variance
is
yield
variance
MMV + MYV/MSUV
0+ MYV/MSUV Therefore, MYV/MSUV = Rs. 1,000 [Adv]
= MYV/MSUV
MCV = MPV + MUV/MQV

Using the above ( Rs. 3,000) = ( Rs. Rs. 3,000 = Rs. 3,000 TRUE. data 2,000) we + ( Rs. get, 1,000)
MUV/MQV = MMV + MYV/MSUV

Using the above Using the above ( Rs. 2,000) = Rs. 2,000 = Rs. 2,000 TRUE. data data + we we Rs. get, get, 2,000)
(0)
MCV = MPV + MMV + MYV/MSUV

Using the above ( Rs. 3,000) = ( Rs. 2,000) Rs. 3,000 = Rs. 3,000 TRUE data + (0) + we ( Rs. get, 1,000)
Calculations:
Actual Total Cost of Materials Purchased Actual Quantity of Material Purchased Rs. 6,200 3,000 kg 31 15 /kg
= Rs.

Opening Stock of Materials 100 3,000 2.00 31 15 64 31 ??? ???
Value (Rs.)
200 6,200
Add: Purchase of Materials
Total Stock Less: Closing Stock of Materials Value of Material Consumed
3,100 200 2,900
6,400
a
(6,400 a)
Finding/Assuming the value of opening stock (if not given). Finding the value of closing stock.
Hide/Show
Hide/Show
Working Table:
Standard
Actual
Material Used 2 2 Rs. 4 1 unit 2 4 4 2,900 2,900 60 29 6,000 6,000

SP(SO) =
SP(SO) = Rs. 4/unit
Assumptions:
None.
Notice:

Current Purchase Standard Price Variance = = purchases = 3,000 kgs price = Rs. 31/15/kg price = Rs. 2/kg relating to the purchases made during the current period Quantity Purchased (Standard Price Actual Price) 3,000 kgs (Rs. 2/kg Rs. 31/15/kg) = 3,000 units ( Rs. 1/15/kg) = Rs. 200 [Adv or Unf] This would be the material price variance that you would find in your calculation. Though you consider only the material consumed in your calculations, the material price variance reveals the variance in relation to the purchases made during the current period. This happens if you value the opening as well as closing stocks at the standard prices. Period
In calculations, where we come across fractions, we many a times use their approximate decimal equivalents (Say we use Rs. 2.67 in place of Rs. 8/3). Where you have used such approximate decimal equivalents, you need to understand that there would be slight variation in the answer arrived at. This would be crucial in this topic, where you are trying to verify the variances using the inter relationships among the variances. In such cases, slight adjustments would have to be made to arrive at the correct conclusion. To avoid such occurances, you can use the fractions themselves in calculations, instead of their approximate decimal equivalents. One another way the need for adjustment may be avoided is by using large number of digits after the decimal.

MCV = ({ AO SO
Study Notes
SQ } SP ) (AQ AP)
= ({
1,600 units 1 unit
2 kgs } Rs. 2/kg )
(2,900 kgs Rs.
60 29
/kg)
= ({1,600 2} Rs. 2) (100 Rs. 60) = (Rs. 6,400) (Rs. 6,000) = + Rs. 400 MCV = + Rs. 400 [Fav]

MPV
= AQ (SP AP) 60 29
= 2,900 kgs (Rs. 2/kg Rs.
/kg)
2,900 kgs (
Rs. 58/kg Rs. 60/kg 29
= 100 kgs ( Rs. 2/kg) = Rs. 200 MPV = Rs. [Adv] 200

Study Notes
= ({
1,600 units 1 unit
2 kgs } 2,900 kgs ) Rs. 2/kg
= (3,200 kgs 2,900 kgs) Rs. 2/kg = (+ 300 kgs) Rs. 2/kg = + Rs. 600 MUV/MQV = + Rs. 600 [Fav]


SO} ) SP(SO)
(1,600 units {
2,900 kgs 2 kgs
= (1,600 units {1,450 1 unit} ) Rs. 4/unit = (1,600 units 1,450 units) Rs. 4/unit = (+ 150 units) Rs. 4/unit = + Rs. 600 MYV/MSUV = + Rs. 600 [Fav]
Alternatively
Therefore, MYV/MSUV + Rs. 600
is
zero
all
usage
variance
is
yield
variance
= 0 + MYV/MSUV = MYV/MSUV = [Fav]
MCV = MPV + MUV/MQV
Using the above (+ Rs. 400) = ( Rs. + Rs. 600 = + Rs. 600 TRUE.
data 200)
we (+
Rs.
get, 600)

Using the above Using the above (+ Rs. 400) = + Rs. 400 = + Rs. 400 TRUE. data data + we we (+ Rs. get, get, 400)
(0)
MCV = MPV + MMV + MYV/MSUV

Using the above (+ Rs. 400) = ( Rs. + Rs. 400 = + Rs. 400 TRUE. 200) data + (0) + we (+ Rs. get, 600)
Hint:
Since no mention is made in relation to production, it is assumed that the standard data and the actual data pertain to the same production level and is taken to be 1 unit.

Opening Stock of Materials 500 2,500 3,000 2,350 650 4.50 5 59 12 ??? ???
Value (Rs.)
2,250 12,500 14,750
a
(14,300 a)
Finding/Assuming the value of opening stock (if not given). Finding the value of closing stock.
Hide/Show
Hide/Show
Working Table:
Standard
Actual
Material Used 500 4.50 2,250 650 167 4,175
26

SP(SO) =
500 Rs. 2,250 1 unit
2,250
650
4,175
SP(SO) = Rs. 2,250/unit
Assumptions:
None.
Notice:


Current Purchase Standard Price Variance = = Period purchases = 2,500 kgs price = Rs. 5/kg price = Rs. 4.50/kg relating to the purchases made during the current period Quantity Purchased (Standard Price Actual Price) 2,500 kgs (Rs. 4.50/kg Rs. 5/kg) = 2,500 units ( Rs. 0.50/kg) = Rs. 1,250 [Adv or Unf] This would be the material price variance that you would find in your calculation. Though you consider only the material consumed in your calculations, the material price variance reveals the variance in relation to the purchases made during the current period. This happens if you value the opening as well as closing stocks at the standard prices.

MCV = ({ AO SO
Study Notes
SQ } SP ) (AQ AP)
= ({
1 unit
500 kgs } Rs. 4.50/kg )
(650 kgs Rs.
167 26
/kg)
1 unit = ({1 500} Rs. 4.50) (25 Rs. 167) = (Rs. 2,250) (Rs. 4,175) = Rs. 1,925 MCV = Rs. 1,925 [Adv]

MPV
= AQ (SP AP) 650 kgs (Rs. 4.50/kg Rs. 167 26
/kg)
650 kgs = (
Rs. 117/kg Rs. 167/kg 26
= 25 kgs ( Rs. 50/kg) = Rs. 1,250 MPV = Rs. [Adv] 1,250

Study Notes
= ({
1 unit 1 unit
500 kgs } 650 kgs ) Rs. 4.50/kg
= ({1 500 kgs} 650 kgs) Rs. 4.50/kg = (500 kgs 650 kgs) Rs. 4.50/kg = ( 150 kgs) Rs. 4.50/kg = Rs. 675 MUV/MQV = Rs. 675 [Adv]


SO} ) SP(SO)
(1 unit {
650 kgs 500 kgs
1 unit} ) Rs. 2,250/unit
= (1 unit {1.3 1 unit} ) Rs. 2,250/unit = (1 unit 1.3 units) Rs. 2,250/unit = ( 0.3 units) Rs. 2,250/unit = Rs. 675 MYV/MSUV = Rs. [Adv] 675
Alternatively
Therefore, MYV/MSUV Rs. 675
is
zero
all
usage
variance
is
yield
variance
= 0 + MYV/MSUV = MYV/MSUV = [Fav]
Hint:
Since the materials at standard costs the rate at which both the opening stock as well as the closing stock are to be valued is the standard price i.e. Rs. 8/kg.

Opening Stock of Materials 8,200 8,200 1,075 7,125 8.40 8.40 8.00 12,056 1,425
Value (Rs.)
68,880 68,880 8,600 60,280
Working Table:
Standard
Actual
Quantity Price Value/Cost Quantity (kgs) Rs/kg (Rs) (kgs)

Material Used 8 8 Rs. 64 1 unit 8 64 64 7,125 7,125
Price Rs/kg
12,056 1,425
Value/Cost (Rs)
60,280 60,280

SP(SO) =
SP(SO) = Rs. 64/unit
Assumptions:
None.
Notice:

MCV
= ({
Study Notes
AO SO
SQ } SP ) (AQ AP)
= ({
1,200 units 1 unit
8 kgs } Rs. 8/kg (7,125 kgs ) Rs.
12,056 1,425
/kg)
= ({1,200 8} Rs. 8) (5 Rs. 12,056) = (Rs. 76,800) (Rs. 60,280) = + Rs. 16,520 MCV = + Rs. [Fav] 16,520

MPV
= AQ (SP AP) 12,056 1,425
= 7,125 kgs (Rs. 8/kg Rs.
/kg)
7,125 kgs = (
Rs. 11,400/kg Rs. 12,056/kg 1,425
= 5 kgs ( Rs. 656/kg) = Rs. 3,280 MPV = Rs. [Adv] 3,280

MUV/MQV = ({
= ({
Study Notes
AO SO
SQ } AQ ) SP
1,200
8 kgs } 7,125 kgs ) Rs.
units 1 unit
8/kg
= ({1,200 8 kgs} 7,125 kgs) Rs. 8/kg = (9,600 kgs 7,125 kgs) Rs. 8/kg = (+ 2,475 kgs) Rs. 8/kg = + Rs. 19,800 MUV/MQV = + Rs. [Fav] 19,800


SO} ) SP(SO)
(1,200 units = {
7,125 kgs 8 kgs
= (1,200 units {890.625 1 unit} ) Rs. 64/unit = (1,200 units 890.625 units) Rs. 64/unit = (+309.375 units) Rs. 64/unit = + Rs. 19,800 MYV/MSUV = + Rs. [Fav] 19,800
Alternatively
MUV/MQV =
=
is
zero
all
usage
variance
is
yield
variance
MMV + MYV/MSUV
0+ MYV/MSUV Therefore, MYV/MSUV = + Rs. 19,800 [Fav]
= MYV/MSUV
Calculations:
Actual Total Cost of Materials Purchased Actual Quantity of Material Purchased Rs. 9,000 3,000 units
= Rs. 3/unit

Opening Stock of Materials 3,000 3,000 500 2,500 3 3 ??? ???
Value (Rs.)
9,000 9,000
a
(9,000 a)
Since there is no opening stock we only need to find the value of closing stock in order to find the value of material consumed. Finding the value of materials consumed involves:
Finding the value of closing stock.
Hide/Show
Working Table:
Standard
[Production: 1 tonne]
Actual
[Production: 80 tonnes]
Quantity Price Value/Cost Quantity Price Value/Cost (units) Rs/unit (Rs) (units) Rs/unit (Rs)
Material Used 25 25 Rs. 50 1 ton 2 50 50 2,500 2,500 3.20 8,000 8,000

SP(SO) =
SP(SO) = Rs. 50/ton
Assumptions:
None.
Notice:


Current Purchase Standard Price Variance = = purchases = 3,000 units price = Rs. 3/unit price = Rs. 2/unit relating to the purchases made during the current period Quantity Purchased (Standard Price Actual Price) 3,000 units (Rs. 2/unit Rs. 3/unit) = 3,000 units ( Rs. 1/unit) = Rs. 3,000 [Adv or Unf] This would be the material price variance that you would find in your calculation. Though you consider only the material consumed in your calculations, the material price variance reveals the variance in Period
relation to the purchases made during the current period. This happens if you value the opening as well as closing stocks at the standard prices.

MCV = ({ AO SO
Study Notes
SQ } SP ) (AQ AP)
= ({
80 tons 1 ton
25 units } Rs. 2/unit )
(2,500 units Rs.3.20/unit
= ({80 25} Rs. 2) (2,500 Rs. 3.20) = (Rs. 4,000) (Rs. 8,000) = Rs. 4,000 MCV = Rs. 4,000 [Adv]

MPV
= AQ (SP AP) = 2,500 units (Rs. 2/unit Rs. 3.20/unit)
= 2,500 units ( Rs. 1.20/unit) = Rs. 3,000 MPV = Rs. [Adv] 3,000

Study Notes
= ({
80 tons 1 ton
25 units } 2,500 units ) Rs. 2/unit
= ({80 25 units} 2,500 units) Rs. 2/unit = (2,000 units 2,500 units) Rs. 2/unit = ( 500 units) Rs. 2/unit
= Rs. 1,000
MUV/MQV
Rs. [Adv] 1,000


MYV = (AO { AQMix SQMix TQAM TQSM
SO} ) SP(SO)
= (AO {
SO} ) SRY
(80 tons = {
2,500 units 25 units
1 ton} ) Rs. 50/ton
= (80 tons {100 1 ton} ) Rs. 50/ton = (80 tons 100 tons) Rs. 50/ton = ( 20 tons) Rs. 50/ton = Rs. 1,000 MYV/MSUV = Rs. [Adv] 1,000
Alternatively
Therefore, MYV/MSUV Rs. 1,000
is
zero
all
usage
variance
is
yield
variance
= 0 + MYV/MSUV = MYV/MSUV = [Adv]

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The given data arranged in the form of a working table Standard [Output : 1 kg] Actual [Output : 1,000 kg]

4 kgs } Rs. 2.45/kg ) (4,600 kgs Rs. 2.75/kg)

= AQ (SP AP) MPV = 4,600 kgs (Rs. 2.45/kg Rs. 2.75/kg)

= 4,600 kgs ( Rs.

4,600 kgs 4 kgs

1 kg} ) Rs. 9.80/kg

(1,000 kg {1,150 1 kg} ) Rs. 9.80/kg

Total Less: Loss Actual Net SP(SO) = SCMix SO

Rs. 100 70 kgs

Material Cost Variance

2,10,000 kgs 70 kgs

100 kgs } Rs. 1/kg ) (2,80,000 kgs Rs. 0.90/kg)

Material Price Variance Study Notes

Material Usage/Quantity Variance

100 kg } 2,80,000 kg ) Rs. 1/kg

Material Mix Variance Study Notes

Material Yield/Sub-Usage Variance Study Notes

= (2,10,000 kg {28,000 70 kg} )

= (2,10,000 kg 1,96,000 kg)

/kg MYV/MSUV + Rs. [Fav] 20,000

Calculation of Value of Materials Consumed:

Finding the value of materials consumed involves:

Finding/Assuming given). Hide/Show

Finding the value of closing stock.

Total SP(SO) = SCMix SO

SP(SO) = Rs. 5/unit

Price Variance related to purchases made during the current period

Material Cost Variance

1,000 units 1 unit

2.5 kgs } Rs. 2/kg )

(3,000 kgs Rs.

Material Price Variance Study Notes

Rs. 6/kg Rs. 8/kg 3

Material Usage/Quantity Variance

1,000 units 1 unit

2.5 kgs } 3,000 kgs ) Rs. 2/kg

Material Mix Variance Study Notes

Material Yield/Sub-Usage Variance Study Notes

3,000 kgs 2.5 kgs

1 unit} ) Rs. 5/unit

MCV = MPV + MUV/MQV

MUV/MQV = MMV + MYV/MSUV

MCV = MPV + MMV + MYV/MSUV

Calculation of Value of Materials Consumed:

Add: Purchase of Materials

Total Stock Less: Closing Stock of Materials Value of Material Consumed

3,100 200 2,900

Finding the value of materials consumed involves:

Total SP(SO) = SCMix SO

SP(SO) = Rs. 4/unit

Price Variance related to purchases made during the current period

Material Cost Variance

1,600 units 1 unit

2 kgs } Rs. 2/kg )

(2,900 kgs Rs.

Material Price Variance Study Notes

= 2,900 kgs (Rs. 2/kg Rs.

Rs. 58/kg Rs. 60/kg 29

Material Usage/Quantity Variance

1,600 units 1 unit

2 kgs } 2,900 kgs ) Rs. 2/kg

Material Mix Variance Study Notes